First Data 2009 Annual Report Download - page 67

FIRST DATA CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Cash and cash equivalents also includes amounts held outside of the U.S. at December 31, 2009 and 2008
totaling $247.1 million and $166.1 million, respectively. As of December 31, 2009, there was approximately
$125 million of cash and cash equivalents held outside of the U.S. that could be used for general corporate
purposes. The Company plans to fund any cash needs in 2010 within the International segment with cash held by
the segment, but if necessary, could fund such needs using cash from the U.S., subject to satisfying debt covenant
restrictions.
Cash Flows from Operating Activities from Continuing Operations
Successor Predecessor
Year ended
December 31,
Period from
September 25,
2007 through
December 31,
Period from
January 1,
2007 through
September 24,
Source/(use) (in millions) 2009 2008 2007 2007
Net (loss) income from continuing operations ........... $(1,014.6) $(3,608.0) $(262.9) $ 569.7
Depreciation and amortization (including amortization
netted against equity earnings in affiliates and
revenues) ...................................... 1,553.8 1,559.6 427.2 540.2
Other non-cash and non-operating items, net ............ 654.1 3,224.3 38.2 88.7
Increase (decrease) in cash, excluding the effects of
acquisitions and dispositions, resulting from changes in:
Accounts receivable, current and long-term ......... 288.8 (86.4) (316.9) (145.4)
Other assets, current and long-term ................ 215.6 297.4 124.8 (28.7)
Accounts payable and other liabilities, current and
long-term .................................. (40.2) (18.5) (103.2) (13.3)
Income tax accounts ........................... (657.9) (768.8) (61.4) 69.6
Excess tax benefit from share-based payment
arrangement ................................ — (13.1) — (219.8)
Net cash provided by (used in) operating activities from
continuing operations ............................ $ 999.6 $ 586.5 $(154.2) $ 861.0
Cash flows provided by (used in) operating activities for the periods presented resulted from normal
operating activities and reflect the timing of the Company’s working capital requirements.
Cash flows from operating activities for the year ended December 31, 2009 included a source of cash of
$246 million which resulted from funding of domestic settlement obligations which should have been received
from a card association on December 31, 2008 but was not received until the first business day of 2009 due to a
file transfer delay.
The Company’s operating cash flow is impacted by its level of debt. Approximately $1,412.2 million,
$1,424.7 million, $480.0 million and $90.5 million in cash interest was paid during 2009, 2008, the 2007
successor period and the 2007 predecessor period, respectively. Cash interest increased significantly subsequent
to the merger on September 24, 2007. In addition, since September 2008, interest on the Company’s senior
unsecured debt is payable semi-annually in the first and third quarters of the year. Accordingly, the cash interest
of the Company is greater in the first and third quarters than it is in the second and fourth quarters (all other debt
has interest due monthly or quarterly). Cash interest payments in 2010 are expected to be similar to interest paid
in 2009. Using December 31, 2009 balances, a 10 percent increase in interest rates on an annualized basis would
increase interest expense by approximately $1.3 million.
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